CHAPTER 8 TEST

What is the primary goal of accounting as described in the text?

• To increase sales

• To provide relevant, timely information for better economic decisions

• To reduce taxes

• To expand business operations

Who are some of the key users of accounting information mentioned in the text?

• Customers

• Marketing managers

• Competitors

• Suppliers

What might employees at Patisserie Valerie do if earnings drop?

• Request more vacation time

• Decide to polish their résumés

• Invest in company stocks

• Organize a company event

What is a potential consequence for employees if a company faces financial difficulties?

• They might receive a bonus.

• They could be laid off.

• They will get a promotion.

• They will have more job security.

What is the role of public accountants?

• They work within a company to provide analysis and prepare reports.

• They perform accounting functions for government agencies.

• They provide services such as tax preparation and external auditing.

• They ensure banks comply with regulations.

What is the role of management accountants?

• They provide services on a fee basis to clients.

• They work within a company to provide analysis and prepare reports.

• They perform accounting functions for federal government agencies.

• They ensure banks comply with regulations.

What is the major output of financial accounting?

• Marketing plans

• Financial statements

• Employee satisfaction reports

• Product development strategies

What is the role of the Financial Accounting Standards Board (FASB)?

• To manage coffee shop franchises

• To enforce tax laws

• To establish accounting principles

• To regulate stock markets

What is one of the key objectives of GAAP as ensured by the FASB?

• To increase company profits

• To ensure financial statements are relevant

• To reduce employee turnover

• To expand business operations

What does a balance sheet summarize?

• A firm's annual revenue

• A firm's financial position at a specific point in time

• A firm's marketing strategy

• A firm's employee performance